- This interview highlights the need for Nigeria to shift towards an electricity-based auto market due to the effects of increasing oil prices on the economy.
- Despite power challenges, Nigeria can embrace electric vehicles (EVs) using various energy sources, offering cost-effective and sustainable transportation solutions.
- The private sector plays a crucial role in developing the EV market, particularly in public transportation, by spearheading infrastructure and local assembly investments.
In the transitional phase from July to September 2023, the international oil market witnessed an upward surge, pushing the Brent crude market beyond the significant threshold of $94 per barrel.
Chibueze Ekeh, the Chief Executive Officer, sat down with Nairametrics to dissect the ramifications of this price escalation for Nigeria.
Ekeh asserted that while the rise in oil prices presents a dual-edged scenario for the nation, it notably underscores the urgent imperative of pivoting towards an electricity-centric automotive landscape.
He emphasizes that while heightened oil prices potentially burden the average Nigerian with escalated costs, they concurrently serve as a clarion call for the Nigerian government to expedite its transition towards an electricity-driven auto market.
This transition, he suggested, holds the key to effectively managing the amplified financial burdens cast upon citizens due to the surge in oil prices.
The analysis navigated the intricate balance between global oil dynamics and the pressing need for Nigeria to metamorphose its auto industry into an electricity-propelled realm, ultimately ensuring sustainability and economic resilience in the face of oscillating oil markets.
Below are excerpts from the interview:
NAIRAMETRICS: As Nigeria looks to develop a thriving gas market, how do you see the country’s energy market unfolding as global oil prices keep rising, Brent crude is currently above $94 per barrel.
Chibueze Ekeh: The current dynamics in the global and local energy market present a fascinating landscape. On a global scale, oil prices have seen a consistent upward trajectory, further amplified locally by the recent removal of petrol subsidies, and increasing domestic petrol prices.
However, gas, closely tied to oil, is under price regulation domestically, suggesting stability.
In this scenario, diesel, petrol, and electricity prices have all experienced recent hikes. As these elements constitute major inputs in production, the consequential inflationary effect has been palpable, affecting the costs of goods and services. Should oil prices continue their ascent, a domino effect is expected.
The government could witness a boost in tax revenues, and energy companies might see a surge in profits. However, this could translate into increased costs for the average Nigerian.
Yet, with strategic fiscal and monetary policies and enhanced collaboration between pertinent government bodies such as CBN, FIRS, NNPC, and other relevant MDAs, a promising opportunity emerges to steer the economy back on a prosperous course. It is at this pivotal juncture that judicious decisions and cohesive actions can shape a robust and sustainable economic future.
NAIRAMETRICS: If electric vehicles (EVs) are an option for Nigeria, how do we navigate that solution given the fact that we have no reliable power sector? There is simply no power supply, can we achieve both at the same time?
Chibueze Ekeh: Simultaneous adoption of electric vehicles (EVs) and ensuring a reliable power supply is entirely within our reach. Electric vehicles operate on battery power and can be charged using various electricity sources, including the grid, solar energy, or other alternatives.
To enhance power supply reliability, we should harness the potential of distributed renewable energy sources. Globally, there is a growing shift towards renewable energy and the integration of electric vehicles.
In developed nations, electric car batteries are emerging as substantial contributors to the grid’s power supply. When these vehicles are connected to the grid and not in use for transportation, their batteries provide backup power.
Nigeria can derive significant advantages by aligning with this trend. Embracing electric vehicles not only bridges the power supply gap but also offers sustainable alternatives to vehicles powered by petrol or compressed natural gas (CNG).
The path to a future where clean, reliable energy and modern transportation coexist is clear, presenting immense potential for our nation.
NAIRAMETRICS: From your experience working in the energy sector, are Nigerians ready to adopt Electric Vehicles? Bear in mind that the current inflation rate is 25.8% and affordability is a problem for millions of people.
Chibueze Ekeh: Inflation has unquestionably surged, yet Nigerians possess a remarkable resilience, willingly investing in goods or services that enhance their productivity. Nigerians have a knack for swiftly embracing the latest technologies once made accessible to them.
A prime example is the revolution brought about by the telecommunications sector, where despite sim cards initially being perceived as relatively expensive, their rapid and extensive adoption was unexpected.
Once a widespread understanding is cultivated, illuminating the long-term cost-benefit dynamics between petrol, CNG, and electric vehicles, the adoption of EVs is destined to soar. Nigerians, when presented with compelling evidence and the promise of advantageous outcomes, have consistently showcased a propensity for embracing progressive technologies that promise a sustainable and efficient future.
The obstacle of affordability indeed stands as a significant hurdle, but intriguingly, it also unfurls a colossal opportunity.
Picture this: over a 5-year horizon, the expenses tied to procuring and charging a new electric vehicle at designated charging stations might plummet below the outlay involved in purchasing and fueling a petrol-driven counterpart for an equivalent period.
It’s noteworthy that EVs are already globally available at a price point akin to traditional petrol vehicles.
A pivotal paradigm shift manifests when we recognize that the cost of recharging an electric vehicle is flexible, breaking free from the shackles of international crude oil or petrol prices.
Furthermore, charging through solar means during daylight hours emerges as the most cost-effective option.
This underlines the potential of modern technology to curtail transportation expenditures, ultimately leading to tangible benefits for the populace.
The trajectory is poised for an exciting transformation where the cost-efficiency of sustainable transportation takes center stage, reshaping the landscape of mobility for the better.
NAIRAMETRICS: What role can the private sector play in the wide-scale development of the EV market in Nigeria?
Chibueze Ekeh: The integration of Electric Vehicles (EVs) stands as a pivotal stride toward sustainability and decarbonization.
To champion this transformation, the private sector emerges as a vanguard, setting the pace in the widespread adoption of EVs across organizations and urban landscapes.
In numerous cities, private sector entities have already taken the lead, particularly in the domain of public transport.
This early entry provides a unique opportunity for these stakeholders to showcase their commitment by pioneering pilot charging stations strategically positioned in major urban centers nationwide.
Moreover, the private sector possesses the capacity to invest in local assembly facilities for a range of electric vehicles, encompassing bikes, tricycles, cars, and buses.
This strategic move not only fosters local industry but bolsters the nation’s self-sufficiency in sustainable transportation solutions.
By boldly stepping into this sphere, the private sector amplifies its role as a driver of innovation and change, paving the way for a greener and more eco-conscious future.
NAIRAMETRICS: Some clean energy enthusiasts are developing electric solutions for local tricycles and small vehicles in Nigeria, yet they cannot access government support to scale, what can they do to scale these local solutions?
Chibueze Ekeh: The initiatives spearheaded by local entrepreneurs deserve utmost commendation and must be actively supported.
A synchronized effort involving the government, financial institutions, and local and international development partners, among others, is imperative.
Grants, particularly in the form of technical assistance, can significantly mitigate the risks associated with these investments.
Incentivizing the adoption of electric vehicles (EVs) and CNG-powered vehicles could prove highly effective.
The government could pioneer measures such as dedicated priority lanes for these vehicles, privileged parking spaces for EVs in public areas and parking lots, as well as reduced vehicle registration and renewal costs.
These strategic interventions would not only boost the uptake of eco-friendly transportation options but also steer the nation towards a sustainable and future-forward mobility landscape.
NAIRAMETRICS: In your opinion, how long will it take for Nigeria to fully develop an electricity-based economy? Some experts believe it will take decades, in this case, are we not better off relying on gas?
Chibueze Ekeh: Predicting the exact timeline of this transformation is intricate. However, various ongoing endeavors are propelling the shift towards an electric-powered economy.
The recent revamping of the electricity law has substantially opened up both on-grid and off-grid markets, providing clarity to customers, operators, and investors.
Remarkably, states are now crafting their electricity regulations, a marked shift from just a year ago. These catalytic activities underscore how swift advancements can accelerate adoption rates significantly.
In the ambitious pursuit of achieving net zero by 2060, Nigeria faces the imperative of curtailing carbon emissions, a substantial portion of which arises from greenhouse gases. While gas is acknowledged as a transitional fuel with lower carbon intensity compared to oil, it remains crucial in this transition.
Demand-side dynamics are increasingly steering the adoption of renewable energy and electric vehicles.
The escalating demand for clean energy stems from the alarming manifestations of climate change, evident in unprecedented flooding, scorching heat waves, rampant forest fires, and the like.
Furthermore, the interplay between international and local demand for Nigeria’s oil and gas vis-à-vis renewable energy and electric vehicles will shape their utilization. Notably, the uptake of CNG-powered vehicles has not surged as rapidly as anticipated.
Thus, monitoring the pace and scale of gas adoption for mobility will be pivotal. Gas’ pivotal role in determining the speed of our transition towards an electricity-centric economy built on clean and renewable energy is a critical aspect to observe.
